Deleting Documents in Patent Cancellation Proceeding

August 4, 2015

fighting robots

Aquatron and Maytronix are competing Israeli companies that each make pool cleaning robots.

Maytronix was awarded Israel Patent IL 206154 titled “Pool Cleaning Robot”. Aquatronix filed to have the mark cancelled.

In the cancellation proceedings various issues came up such as whether Aquatronix had received permission from Maytronix to use the patent. However, in a procedural agreement between the parties, it was decided that the summation statements would not to relate to this issue.

In their summation, Maytronix, did, however relate to the alleged license to use the patent, and so Aquatronix filed to have the relevant passages deleted from the file. In their defense, Maytronix’s argued that Aquatronix had submitted emails that related to the agreement as part of their evidence, and this had voided the procedural agreement.

Ms Jacqueline Bracha used Contract Law (section25a) to rule that what was agreed between the sides is binding. Had they intended to state that evidence should be suppressed they could have done so. The disputed sections on the patentee’s summation were ordered deleted from the record, but the emails submitted by Aquatronix were allowed.


Israel Supreme Court Issues Long Awaited Decision regarding Service Inventions

July 23, 2015

employment agreement

Isscar is a leading Israel company that manufactures hard metal cutting tools. As an employee at Isscar, Gidon Barzani was involved in the development of hard metal cutting tools at Isscar during the years 1992 to 1995, and again between 1997 and 2001 and was involved in a certain service invention, his actual contribution being a matter of contention. The employee signed various documents that gave up on monetary claims.

In Israel, an employee invention is owned by the employer. However, under Section  134 of the Law, the employee is entitled to compensation, the amount of which is determined by a special committee under Section 109.

The Committee, at the head of which sits the retired Supreme Court Justice, Itzak Englard, the Commissioner of Patents and an university professor, rejected Barzani’s claims as he had had waived his rights to consideration for the inventions when he signed on the general waiver.

Barzani appealed to the Supreme Court as a High Court of Justice (BAGATZ) see here which resulted in the committee freezing its actions.

One of the more interesting legal questions is whether a general waiver as part of the employment contract, where no invention is yet conceived can be considered as legally binding. (Talmudist’s may note a similarity to discussion of unlaid eggs).

The Supreme Court rejected the appeal arguing that it had limited power to interfere since under Section 111, the Bagatz ruling was final. The Supreme Court ruled that Section 134 describes a non-cogent right that is not a socialist employee right that requires special defense. On the face of things and with deference to the language of the clause, the decision appears to be correct, and certainly is sufficiently reasonable that there is no justification for court interference.

Nevertheless, the court noted that in a dynamic and changing world there is room for additional legislation or for companies to come up with voluntary compensation schemes. However, there is no reason for the court to interfere.

Judge Reuven, Deputy President of the Supreme Court quoted Section 109 of the Law as follows:

Where there is no agreement providing compensation to the employee for his service invention, regarding the amount of compensation and the conditions, these will be determined by the Committee for Compensation and Royalties.

Section 111 fixes the finality of the committee’s decision, but there is no doubt that in extreme circumstances, the Supreme Court sitting as a High Court of Justice can interfere. Since, however, the committee includes a retired senior court justice, the commissioner and an academic, interference in its conclusions are likely to be minimal, and this instance does not justify the court’s involvement.

The main argument, following the Actelis ruling of 2010 is concerned with the question of whether Section 134 should be considered cogent or dispositive. The committee came to the conclusion that it is not a cogent right and is not an example of employer-employee labour law where (due to the inherent differences in power between the sides) workers’ rights require special protection. The ruling seems to be correct, but anyway, since the Law states that the committee’s rulings are final, there is no room for the court to interfere.

Nevertheless, the court has criticized the current situation and noted that common sense and natural justice indicate that there is room for a more equitable arrangement,  whether the result of voluntary agreement or of legislation, and such arrangements exist in the private sector.

4353/14 Appeal to Supreme Court, Barzani vs. Isscar, Ruling by Rubinstein Fogelman and Mazuz 8/7/15

COMMENT

There was a lot of interest in this case, and we believe that employers will be giving deep sighs of relief. Employees will probably feel that the system favours the company against the individual. I am aware that some academics have strong feelings, see for example, Dr Shlomit Ravid’s position here and here.

Since the court has criticized the committee’s ruling and is not prepared to get involved, it is not inconceivable that a future committee could reach the opposite conclusion. Indeed, one of the judges of this ruling might, on retirement, sit in such a committee. There may, therefore, be room for clear legislation on the issue.

Personally, I think the Supreme Court decision is correct. I encourage corporate clients to institute compensation programs or at least weekend breaks and the like to encourage employees to come forwards with ideas, but think that changing the law in Israel may result in multi-nationals taking their R&D centers elsewhere, and that is not good for the economy or the workers.


Tel Aviv Court Refuses to Endorse Out-of-Court Settlement Between Service Providers and ISPs requiring that the ISPs Block Site Offering Software for Facilitating Downloading of Copyright Protected Material

July 14, 2015

rubber stamp
ZIR”A Organization for Internet Copyright LTD, United King Film Distribution 1990 LTD, DVS Satellite Services 1998 LTD, Hot Telecommunications, Keshet Transmissions, The Noga Net LTD and Noga Telecommunications LTD sued Anonymous, Bezeq International LTD, Partner Telecommunications, 012 Smile Telecommunications LTD, 013 Netvision LTD, Hot Net Internet Services and Internet Rimon LTD.
Broadly speaking, the case is one of content providers suing Internet Service Providers, and the not identified owner of a website allowing downloading of a piece of software that enables accessing and downloading content.

The content providers sued for a temporary injunction against the service providers and for details of the surfers.

Popcorn is software that allows both streaming content for online viewing and downloading content for future viewing. The plaintiffs sought to stop this service and to require ISPs to prevent access to the website allowing downloading of the software. A temporary injunction issued on 19 May 2015. On 3 June 2015 a hearing was held and on 11 June 2015, the plaintiff announced that it had reached an agreement with 013 Netvision LTD, Hot Net Internet Services an Internet Rimon LTD.

Judge Magen Altuvia of the Tel Aviv District Court ruled that there was no place to issue a temporary injunction to block access to Internet sites that allow downloading of software programs that allows viewing of creative works for which copyright protection is alleged. Such an injunction is ineffective and damages the free flow of information, the right of the public to know, freedom of expression and provides power to Internet Service Providers to determine what may or may not flow through the Internet Conduit. Other issues are the fight of anonymity and of privacy on the internet.

In consequence of the above position, the temporary injunction requested by a website and by an Internet Service Provider to prevent the use of the Program Popcorn was denied. It appears that many Internet service providers had come to an understanding with the plaintiffs, but one held out. The one that held out was vindicated. Furthermore, the agreement reached by the plaintiffs with the other ISPs would not be ratified by the court and the temporary injunction was cancelled.

The Court ruled that by law, the court is not able to order a temporary injunction against a third party to reveal the identity of an anonymous surfer that allegedly has committed an offence. It appears that the plaintiffs themselves were tardy in requesting the injunction and this indicates that the temporary injunction is hardly significant to the plaintiffs and there is thus no justification in issuing it.

The balance of interests does not favor the plaintiffs where there is no clear legislation that allows action against Internet Service Providers. Closing down the website will not prevent the downloading and installing of Popcorn and will have no action against those Internet surfers who have already downloaded the program, and there are opposing values of free flow of information, right of the public to know, freedom of expression.

Plaintiff’s Position
On 29 June 2015, the plaintiff requested that an agreement made with Partner Telecommunications, 012 Smile Telecommunications LTD, 013 Netvision LTD, Hot Net Internet Services and Internet Rimon LTD be ratified by the court. Bezeq International held out and the plaintiffs requested a temporary injunction again them.

According to the plaintiffs, United King Film Distribution 1990 LTD, DVS Satellite Services 1998 LTD, Hot Telecommunications, Keshet Transmissions, The Noga Net LTD and Noga Telecommunications LTD held copyright in various programs and none of them had authorized Anonymous or Bezeq International to use the protected content via the Popcorn website or program.

Anonymous is not known to the plaintiffs [the ruling uses both verbs to know, i.e. conaitre and savoir, knowing in the Biblical sense does not seem to be intended]. The name Anonymous relates to the owner of the Popcorn website that allows surfers to choose to watch programs without the plaintiff’s permission, thereby infringing copyright under the Copyright Act 2007, and being guilty of unjust enrichment under the Law of Unjust Enrichment 1979.
The ISR is the bottleneck that has the cheapest and simplest way to stop access to Popcorn’s website from Israel based Internet browsers.

On 14 May 2015, and again on 17 May 2015, the plaintiffs contacted all the internet service providers but these were ignored.

On 28 April 2016, the Chancery Division of England ruled on Popcorn’s website and in that ruling, determined that the Popcorn sites infringed copyright and Internet Service Providers should block access. Twentieth Century Fox Film Corporation and Others vs. Sky UK and others. Case No: HC2014-00229, EWHC 1082 (ch). According to the plaintiffs, Judge Gidon Ginat (also of the Tel Aviv District Court) adopted the UK decision in his ruling of 12 May 2015, T.A. 11-333227-13 NMC United Entertainment LTD. Et. Al. vs. Bloomberg et al. In that instance, the Court found that by allowing conversion from view only format to saveable MP3 format, Mr Parpori had aided and abetted copyright infringement and that Internet service Providers should block access to the site. See here for my analysis of that case.

According to the plaintiffs, both the Fox decision and the Papori decision support their position that access to the Popcorn site should be blocked. Due to the ‘unacceptable ease of infringement and the fatal wounding of their rights’ there is a need to grant the requested injunctions as soon as possible to preventthe daily infringements.

Bezeq International’s Position
Bezeq International claims that the plaintiff’s filed suit following the ruling in the UK against Popcorn, despite the software being available from much earlier. Suit was filed only in May, so this case cannot be considered urgent.
Bezeq International claims that the plaintiffs do not have a single damages claim against them and therefore there is no room to grant an injunction against them. There are a number of Supreme Court precedents that prohibit issuing injunctions against third parties.

Bezeq considers that such a third party injunction would do them damage whilst would not have an effect on Popcorn since they would simply open up further sites allowing content to be downloaded.
In the appeal considering obligations of ISPs 4447/07 Rami Mor vs. Barak ITC (1994) Bezeq international, Judge Rivlin of the Supreme Court related to whether the Court had the authority to force a third-party to reveal the identity of an anonymous surfer who committed an offence.

There judge Rivlin ruled:

“My position Is that the Courts should not issues such injunctions without a proper hearing. Until there is specific legislation that that allows the requested injunction in cases of slander, there is no alternative but to inquire into whether there is a general framework that allows such third party injunctions. In other words, anonymous Internet surfing should be treated like anything else, and there has to be either specific legislation or general legislation and there is no justification to invent such a framework by judicial legislation.
In the current instance, there are three parties. There is the plaintiff who claims to have been slandered. There is the anonymous slanderer and there is the third party who may know the identity of the anonymous slanderer. This scenario of three parties is not unique to Internet slander. In other contexts, a party may consider himself damaged by an anonymous damager and may suspect that a third party may know the identity of the culprit. The question in front of us is thus wider than anonymous internet surfing. The question is whether Israel civil law allows forcing a party to identify a damager so that suit may be filed against him.

One possible source for contemplating forcing the revelation of the identity of the third party is Section 75 of the Law Courts Law 1984. Section 75 grants wide posers to the courts one the infringement is proven. It does not provide rights outside of a civil proceedings. The law does not contemplate court rulings in the air, but court rulings against parties being prosecuted.
Where A damages B, B may obtain an injunction against A. However, where A damages B, B cannot obtain an injunction against C who is not connected to A or to B. This would require special authorization. In other words, one cannot pull oneself up by one’s bootlaces and cannot create a civil matter against a third party by legislation designed to provide recourse against actual infringers.
This logic is good for Sections 71-75 of the Civil Tortes Ordinance, also considered as a possible basis for action. These Sections deal with the courts authority to provide retribution for civil damages and to give injunctions to act or to refrain from acting, but are not relevant in this instance. The injunction requested against the Internet Service Provider is not with respect to actions by the Internet provider. There are no charges for damages case against the ISP and no grounds for requesting compensation in these clauses so there is no grounds for revealing his identity.

Judge Rivlin went on to refer to another UK case, Norwich Pharmacal, where the court ruled on the revealing of an anonymous infringer in a separate proceeding:

…it should be emphasized that this principle does not have an anchor in Israel law and does not dovetail with any judicial framework recognized in Israel. The opposite is true. It contravenes the spirit and purpose of the judicial framework established by the primary and secondary legislators for Civil Court procedures. Such a change should come from the primary or secondary legislators. [i.e. the Knesset or the Ministry of Justice].

Judge Rivlin’s position was opposed by Judge Elyakim Rubinstein but was endorsed by Judge A.A. Levy.

Judge Magen Altuvia considers that the principles laid out by Judge Rivlin in the Mohr case are appropriate in this instance where the temporary injunction is identical to the main injunction and the rights of the plaintiff and defendants have not been clarified, and where there is no case against the defendant alleging infringement of the rights of any of the plaintiffs. Furthermore in the Appeal 1622/09 Google Israel vs. Brokertov et al. Judge Rivlin reiterated the position in Mohr and stated that “these differences don’t solve the issue of court authority to sanction a third party who is not guilty of any direct claims.

The Plaintiffs rests their case on the Parpori issue. From the way things developed it appears that the plaintiffs only decided to file suit after the Papori ruling on 12 May 2016. Thus only on 14 May 2015, a couple of days after Judge Ginat’s ruling, the plaintiff wrote to the ISPs (defendants 2-7) and requested that access to the Popcorn site be blocked. The law suit was only filed a week later, on 19 May 2015.

It will be appreciated that Tel Aviv District Court rulings are not binding precedents to the Tel Aviv District Court and the Court can ignore the Parpori ruling, whereas the Mohr case is binding precedent. Furthermore, without expanding, Judge Altuvia considers the Parpori scenario rather different. In this instance, there is a difficulty for the plaintiff to identify Anonymous and to prevent alternative websites being set up, so it is not clear that ordering the ISPs to block the site is efficient. Neither Parpori or the UK ruling are binding on the Tel Aviv Court. Indeed, in Mohr, the Supreme Court reviewed UK and US caselaw that allowed action against third parties such as ISPs and didn’t adopt the approach.
In Parpori, the main culprit had the opportunity to defend himself. This is not the case here as the main culprit isn’t identified.

Temporary injunctions are an exception to general procedure and are only appropriate where there is an urgency, which clearly wasn’t the case here, as the plaintiff was tardy in pressing charges.
The program Popcorn does not itself infringe. It merely aids and abets the downloading and viewing of copyright material. Blocking the site does damage to the ISP’s image and other ISPs can choose not to block access.
Clause 9 of the Statement requires the ISP to block future sites. This requires them to be a policeman and a censor for the plaintiffs. This policeman is not to generally police the net but to take action against a specific entity who has not had the opportunity to defend himself in court.

The reluctance of the court to convert ISPs into policemen outweighs the copyright of the plaintiffs.

In view of the above analysis, it would be wrong to endorse the out-of-court agreement as it is not a simple contractual obligation but has in rem aspects. The desired censorship would have consequences for the public and the Legal Counsel to the Government (Perhaps better translated as the Attorney General, has not addressed the issue, despite being invited to do so.

Conclusion
The temporary injunction granted by the court is voided and the plaintiffs are obliged to compensate Bezeq ben Leumi 40,000 Shekels for costs and legal fees.
Civil Action 37039-05-15 ZIR”A et al. vs. Anonymous, Bezeq Ben Leumi et al. Ruling by Magen Altuvia of Tel Aviv District Court, 1 July 2015.

COMMENTS
With all due respect to Judge Gilad Ginat who I consider to be the most competent IP judge in the District Courts and probably in any of Israel’s Courts now that Judge Gronis has retired, I think that Judge Altuvia is correct. In my comments on Civil Ruling 33227-11-13 NMC United Entertainment LTD et al. vs. Bloomberg et al. Tel Aviv District Court by Judge Ginat, 12 May 2015 I criticized the decision as ultra-vires judicial activism. I don’t accept that there is a lacuna that the legislators forgot about, but rather the current state of the Law reflects conscious government policy, not least due to the fact that when the new copyright act being passed, Israel was regularly being criticized in the US 301 Special Report also here for not having ISPs required to police the net.

I think that Judge Altuvia is correct that this is an instance where the Attorney General should present the government’s position. I think that the Attorney General is supposed to attend to such matters. It seems that Attorney Yehuda Weinstein views things differently and believes that his job is to dictate government policy and to keep the government in line with the positions of the Supreme Court.
For example, at present there is a contentious issue to be debated by the Knesset – the Death Penalty for terrorists. I have no problem with the Knesset debating this issue from time to time. I have no problem with lawyers in private practice, clerics, academics and journalists, human rights activists, victim support groups and the lay public expressing strong opinions, whether for and against. However, I find it totally unacceptable that the Israeli press reports that the Minister of Justice is considering supporting the legislation despite the opposing views of the Attorney General. Sure the Attorney General is entitled to have opinions and to express them to the government ministers. He should do so in a discrete manner and the public and press have no business knowing his personal opinions. The government is selected by the ruling coalition that represents a majority of the members of Knesset who are elected democratically. The Attorney General is an appointee. The current proposed legislation is a private member’s bill with some support from government back-benchers. But Weinstein also speaks out on government policy. This case and many others are not legal issues, but moral, ethical, strategic and tactical ones. If Weinstein is unhappy with supporting a government policy, he should either be professional and do his job to the best of his ability, as Barak apparently did as Attorney General, or he should resign. There are a number of cases where the Attorney General seems to have dictated policy or ignored the government. This is, in my opinion, grounds for dismissing him.

I am very critical of judicial activism, which seems to be justified to protect democracy from the people’s representatives. Thankfully Justice Aharon Barak’s term as president of the Supreme Court has ended and some of the damage to fidelity of the Law and to the democratic process has been reversed. I am pleased that Judge Magen Altuvia and Judge Rivlin have seen fit to take a formalistic stance in this instance.

As to judicial legislation for enhancing enforcement of IP infringement, the Supreme Court has accepted contributory infringement and aiding and abetting infringement in schori vs. Regba (Apppeal to Israel Supreme Court 7614/96) and in the Rav Bareach (Appeal to Israel Supreme Court 1636/98) Crook Lock case.  In the US, the CFAC and the Supreme Court have moved away from these judicially created indirect torts. Arguably both cases are legitimate workarounds. We’ve seen the courts moving away from A.Sh.I.R. which provided legal grounds for sanctions for unregistered designs under the amorphous value of Unjust Enrichment. In absence of amendments to the Patent Law, perhaps it is about time that Srori vs. Regba and Rav Bareakh were reversed?

In the last election I did look for a party with a strong IP position. Unfortunately, it was difficult to find a party with a clear stated position on anything, and none seemed to mention intellectual property in their manifestos, bumper stickers TV commercials. The Knesset is, nevertheless, updating its IP laws. I think we should lobby them to do more rather than give the courts legislative powers. Whilst there are ministers without portfolios, maybe there is room to have an IP Minister or Czar, or a Deputy Minister in the Ministry of Justice or that of Trade and Industry with specific IP responsibilities. Other countries, including the US and the UK have such a position.

One final point, Internet Rimon advertises itself as a religious ISP that blocks pornography, gambling and other websites deemed immoral, objectable under Jewish law and values and damaging. I believe such a pious company should take copyright infringement seriously and block sites such as Popcorn as well, or at least provide the option to parents to elect to block copyright infringing sites.


Coveri (Caveri?)

July 1, 2015

Enrico Coveri

On 3 May 2011, Enrico Coveri s.r.l. filed Israel Trademark Application No. 237567 for ‘COVERI’ coveri(ng) clothing, footwear and headgear, all in class 25. The mark was eventually allowed and published for opposition purposes on 30 April 2012. On 23 July 2012, Sar-Go Investment LTD opposed the mark. (The opposition actually related both to Israel TM 237,567 ‘COVERI’ and to Israel TM 237566 ‘ENRICO COVERI’ in Class 35, however, Sar-Go Investment LTD retracted their opposition to TM 237566 ‘ENRICO COVERI’ which was subsequently granted). In parallel with the Opposition before the Israel Patent Office, Enrico Coveri s.r.l. sued Sar-Go Investment LTD for infringing their (pending) mark. [– this is possible under common law rights, albeit not a good idea to sue before the mark issues].

Sar-Go Investment LTD asked the Court to require that Enrico Coveri s.r.l. post a bond [which is common practice where a plaintiff is not domiciled in Israel] and, on failure by Enrico Coveri s.r.l. to do so, the Court closed the case. On 31 December 2012, Sar-Go Investment LTD filed two trademarks, Israel TM 252378 “COVERI KIDS” for wholesale of clothing and shoes for children and youth, for “COVERI HOME” for wholesale furniture and children’s domestic accessories both in class 35. Both applications were suspended at the Opposer’s request until after the present Opposition is concluded.

Opposer’s Arguments

The Oposer claimed that they have used the (unregistered) marks Coveri Kids and Coveri Home for 15 years and had a reputation among their clients for these marks. The Opposer is a wholesaler whereas the Applicant is a manufacturer [this argument, together with the competing marks scenario created seems to be setting the scene for a request for co-existence]. In consequence of their longer usage in Israel, the Opposer claims that they should take precedence over Enrico Coveri s.r.l. in Israel under Section 24(a1)(2) of the Trademark Ordinance 1972, and, under sections 5(11) and 6(11) argued that allowing Enrico Coveri s.r.l.’s application to register would be unfair trade, would mislead the public and be contrary to the public good. In an alternative strategy, the Opposers argued that if Enrico Coveri s.r.l.’s was not canceled, then the two marks should be allowed to coexist due to the difference in sight and sound of the marks, as their desired mark was to be pronounced CAveri whereas the opposed mark was to be pronounced COveri. [I find this argument a little tenuous. The mark does not come with pronunciation instructions, and Israelis include Bedouin, Russian immigrants, American immigrants, Ethiopians, Thai foreign workers and Sudanese illegal immigrants. I doubt that there is a common pronunciation of vowels].

Applicant’s Counter Arguments

The Applicant claims a worldwide reputation in the word Coveri that goes back to the Seventies. [“When The Levee Breaks” — Led Zeppelin (1971) was a coveri song from the Seventies. It was originally recorded by Kansas Joe Mccoy and Memphis Minnie in 1929!]

The Applicant denied the allegations of misleading the public as they claimed to have the reputation and also argued that the Trademark Ordinance only protects registered marks, which the Opposer had not (then) registered.

Furthermore, the Applicant claimed that they were the first owner of the Coveri mark and back in 1986 had applied for ENRICO COVERI in claims 3 and 18, for soap and leather goods, and this the Opposer’s claims should be rejected. The Opposer was acting in bad faith as it was inconceivable that he was unaware of the Applicant who had marketed goods in Israel that were branded as COVERI.

Discussion

In the District Court proceedings, the current Applicant accused the Opposer of willful infringement and of ignoring requests from the Applicant to cease and desist from using the term Coveri. Furthermore, the Applicant argued that the Opposer’s us of the term Coveri would lead to misleading the public as the Opposer’s goods were sold by the Applicant. The Applicant further claimed dilution of their mark and Opposer’s enrichment at their expense.

In their defense, the Opposer denied knowing about the Coveri brand when they chose their own branding. As wholesalers of clothing brands and not manufacturers, they were unaware of the Applicant’s brand. Furthermore, the Opposer denied infringing the Coveri mark as their marks was Coveri Kids and Coveri Home.

However, as noted above, the District Court Proceedings were thrown out due to Applicant’s failure to post a bond.

The Applicant here, Enrico Coveri s.r.l., argued that the position taken by Sar-Go Investment LTD in the District Court estoppled them from claiming that the current proceeding be dismissed as the parties are the same in both proceedings. Support for this argument was found in Civil Appeal 246/66 Klausner vs. Shimoni.

The Trademark Office considered that the current situation was different as in the previous (court) proceeding, there was no substantive ruling as the case was thrown out. Also, the identities of the parties (and the marks in question) has switched, thus there is no estopple against bringing the case to trial. Furthermore, the legal arguments are different. For additional analysis, see TM 245411 Orez Gamalim Hahav Pninim (graphic logo) Yoram Sassa vs. Yehudit Matck, as published on the patent office website in April.

In conclusion, Deputy Commissioner MS Jaqueline Bracha saw no reason not to rule on the merits of the case.

Inequitable Behavior and the Common Good.

The Opposer claimed that the applications should be canceled as they were filed in bad faith, since the filing occurred 15 years after the opposer was using the mark and gaining a reputation in it. Furthermore, since the Court had thrown the case out, dealing with it on its merits now would be contrary to the public good under Section 11(5). The Applicant also accuses the Opposer of inequitable behavior since the choice of the term Coveri by the Opposer was itself an attempt to cash in on Henrico Coveri’s reputation. Arguments that Coveri means Cover Israeli Kids as the Opposer had claimed were dismissed as fanciful and unconvincing, and the alleged correct pronunciation as CAveri and not COveri as written was further indication of inequitable behavior.

The Opposer considered the marks were not registerable, as, due to inequitable behavior, their registration was impermissible under Sections 11(5) and 39(1a) of the Ordinance. However the Deputy Commissioner considered that this was not grounds for Opposition per se, only, for cancellation of an issued mark. Support for this position was found in the Pioneer decision.

[I am less than happy with the Deputy Commissioner’s ruling that inequitable behavior can be grounds for cancellation of a mark once issued, but not for opposing the mark. I know it is considered a dirty word, but I am relatively formalistic in my approach to the Law and have little time for interpretation of what the law meant to say. However, I can see no logic in allowing grounds of inequitable behavior to be sufficient to have an issued mark canceled, but not sufficient grounds to have a pending mark opposed. This seems senseless. I note that I disagreed with Ms Bracha in the Pioneer case as well  so at least I am consistent. Perhaps consistently wrong, but consistent.]

According to Ms Bracha, Section 11(5) was to cover cases such as to prevent an opponent to prevent an applicants from using opponents copyright protected artwork as trademarks.

Misleading the Public and Unfair Competition

As far as misleading the public is concerned, Ms Bracha considers that the mark has to be at least widely known if not formally ” a well-known mark”. She went on to apply the triple test to examine the similarities between the marks. As far as the sound of the mark is concerned, Ms Bracha noted that the Opposer claims that Coveri Kids has a patah sound (“a” as in cow – i.e. Cah-ver), whereas in on Henrico Coveri’s Coveri, the Sound is a holum “Oh” as in Copper. Noting that they are written the same way, Ms Bracha considers it unlikely that one can ensure that the marks are correctly pronounced and doesn’t think that anyone other than the Opposer’s who would be aware of the difference. [here I disagree. The word Coveri has a Kamatz Qatan and is pronounced Oh as in Copper by Yemenites and Ashkenazim but as an Ah by Spanish and Portuguese and in the Standardized Hebrew pronunciation. Nevertheless, the word, written in English (Latin) letters, could certainly be pronounced either way. This reminds me of the road sign conveniently placed near Heathrow Airport to confuse tourists. It points to Slough. Is the ough an oo as as in through? Is it an uf as in rough, an ‘or’ as in bought? No, it’s an ow as in bough!]

In the Coveri mark and in Coveri Kids and Coveri Home, the dominant word is Coveri. Furthermore, the other words are descriptive and lacking in independent distinctive character. Consequently, the marks are visually and audibly very similar. Both Opposer and Applicant sell clothing and children’s goods, one wholesale and the other retail. The client base is different, but it still overlaps and one could imagine a purchaser of Coveri clothing could go into a COveri Home shop to buy furniture or accessories. Whilst, it is certainly possible that Henrico Coveri is using his name for branding purposes and Coveri Kids means Cover Israeli Kids so there is no intent to confuse, however, it is unlikely that the public would be aware of this. The Opposer has stores in the upscale Kikar Hamedina of Tel Aviv. The Applicant’s witness was more circumspect as to where they were using their trademark.

Reputation

Reputation in a specific market sector is judged by the time period the brand has been in use and the amount of publicity and marketing invested in linking the product to the brand name.

Coveri kids have shown 15 years history of the mark. However, Mina Tzemach’s market research has shown low brand penetration, nevertheless, Ms Bracha agreed with the Applicant that the onus is on the Opposer to show that they have a reputation in the mark and not that the Applicant does not.  Ms Tzemach’s affidavit was an appendix to another one and not a freestanding document. However, the The Opposer did not choose to cross-examine her on her findings which rather strengthens them.

Coveri admitted that they had never opened a shop, but claimed that their neckties and other things were sold in boutique stalls. Consequently, it appears that Coveri Kids and Coveri Home have a larger footprint in the market.

Equitable Behavior

It seems that Enrico Coveri acted after discovering that Coveri Home and Coveri Kids were strong marks in Israel. They first sent cease & desist letters and only subsequently filed their own marks, and later still, filed in the District Court. Under cross-examination from Adv. Tony Greenman, Enrico Coveri’s witness spoke about design shows abroad abut did not answer questions about their local advertising. Despite prompting by both Adv. Tony Greenman and by the Deputy Commissioner, the witness failed to show that the mark had been used in Israel prior 2011 and had local reputation. This lead the Deputy Commissioner to suspect that the Applicant’s registration was merely to prevent being sued by the Opposer and was not indicative of actual use or intent to use.

Although in Israel one can apply for a mark not in use if there is intent to use, however the intent should be genuine. The Israel courts view defensive trademark practices with a jaundiced eye.

Such an approach is also true in the US:

A lack of bona fide intent to use is a ground for an inter partes opposition proceeding to an application before the Trademark Board. Aktieselskabet, 525 F.3d at 21; McCarthy § 20:21, at 20-65,66. Lack of bona fide intent to support an intent-to-use application also may render an application void ab initio upon challenge in federal district court.” (W. Brand Bobosky v. Adidas AG, 843 F. Supp. 2d 1134, 1140 (D. Or. 2011).

The long and real usage by the Opposer and lack of cooperation by the Applicant’s witness lead Ms Bracha to consider that the mark should be refused under Section (6)11 of the Trademark Ordinance.

Previous Rights to the Mark

The Opposer claims prior rights to the mark under Section 24(ia)(2) of the Regulation. As far as distinctive marks is concerned, this is a relevant issue.

As cited in ITT. vs. Ratfone Import LTD, 23 June 2009:

“Furthermore, it is important to note that when a mark is canceled from the register or even if it was never registered, this does not indicate a lack of proprietary rights of the owner. There is a right of reputation which is protected in unregistered marks.

In this instance, however, the Opposer did not register their mark. They did not act to have the mark registered, and the present instance and the previous Court case were superfluous. Having ruled that the Opposition should be accepted under Section 11(6), the ownership of the marks is superfluous, particularly as the Opposer has long established usage and the Applicant has not shown usage in Israel. However, the lack of registration by the Opposer should be taken into account when ruling costs.

Conclusion

Registration of the Italian designer’s mark was refused without a ruling of costs to the Opposer. The Opposer’s marks (Coveri Kids and Coveri Home) can continue to examination following this ruling.

Israel TM 237567 “Coveri” to Enrico Coveri, Trademark Opposition by Sar-Go Investment LTD, Ruling by Deputy Commissioner, Ms Jaqueline Bracha, 27 May 2015

COMMENT

Potahto or Poteitoe?

Gefen or Gafen?

Pronunciation aside, this case bears more than a passing resemblance to the Versace case, since we have a well know international design house and a couple of Israeli stores using the name in ambivalent faith. I therefore suspect we haven’t heard the last of this.


Novartis – Double Patenting in Israel

July 1, 2015

novartis

The present ruling relates to the issue of identical of overlapping patents and patent applications, and examines the ramifications of double patenting in Israel.

IL 2039732 is a Divisional Application of IL 176831 titled “Compressed Pharmaceutical Tablets or Direct Compression Pharmaceutical Tablets Comprising DRR-IV Inhibitor Containing Particles and Processes for their Preparation”.  During prosecution it received a final rejection and the Applicant, Novartis, appealed this final Examiner’s rejection.

The Examiner considered that the claims of the parent and the divisional application are directed to the same invention. After this issue was first raised, the Applicant amended the claims, but the Examiner considered that the amended claim set (claims 1-23) covered the same invention as claims 23-26 of the parent application. Based on 5293/93 Welcome Foundation vs. Patent Commissioner (1993), the Examiner rejected the claims of the divisional application. A telephone conversation was to no avail. The Examiner issued a final rejection noting that there were substantive issues not addressed, and the Applicant appealed this decision to the Commissioner of Patents claiming that the issue is one of interpretation of the Law.

The Commissioner held a hearing and allowed the Applicant to present a short summary of the comparative law in US, Europe, Australia, Japan, China and India. In this instance, the Examiner did not claim that the divisional had identical claims to the parent application, but that there was some overlap. According to the Commissioner, the issue is one of interpretation of Sections 2, 8 and 9 of the law. These state that an inventor is entitled to a patent, that a patent can only cover one invention and that where two or more applicants file for the same invention, the first to file is awarded the patent. The purpose of divisional applications is to prosecute additional inventions claimed within the same parent application.

In the Welcome case, claims 1-10 related to uses of a pharmaceutical preparation in the treatment of various diseases and claim 15 related to a method of preparation of the active ingredient.  Then Commissioner, the late Michael Ophir ruled a claim for use in preparing a medicament’ and ‘use in the treatment of’ were identical. He did not see that the application related to more than one invention. On appeal, Judge Winograd ruled that one can file and prosecution an application for a material, a second one for the method of fabrication and a third one for uses, provided each application is directed to patentable subject matter and there is no overlap between the cases. There Judge Winograd went on to rule that one application cannot include more than one patentable invention, i.e. one should not award more than one patent for one invention, and this is a corollary of Section 8 that a patent should cover one invention. One can file a plurality of applications for a plurality of related patents provided that each one is directed to a patentable invention and the claims are not identical or overlapping.

In the present case, both the parent IL 176831 and the divisional application IL 203972 have the same title. In IL 203972 there is one independent claim. Claims 23 and 24 of the parent IL 176831 each depend on claim 1, and claims 25 and 26 are dependent on claims 24 and 23 respectively.

The independent claim of IL 203972 is directed to using a powder to form a pill for treating a wide range of ailments. Claims 23-26 of the parent IL 176831 are directed to forming tablets and a corresponding process. The divisional relates to various states that are not in the parent application, but both applications have the same specification. According to the Applicant, the parameters are identical but the parent claims the process whereas the divisional application claims use of the active ingredient to prepare a pharmaceutical.

According to the Examiner, the divisional application claims the use of a formulation for treating a disease, where the formulation is given in claims 23-26 and the diseases treated are listed in claims 1-22. In both cases, the formulation is the same, the particle size is the same and the active ingredients and additives are the same as those given in claims 23-26 of the parent.

Novatis found the Welcome decision poorly claimed and poorly reasoned and could not see why two applications could not claim identical or overlapping inventions. They argued that where applicants are the same, there is no need to relate to identical or significantly overlapping claims, holding that the Israel Patent Law does not prevent multiple patenting. Novartis argued that Section 2 is merely a declarative statement that the applicant may file a patent. It does not have legal ramifications, and certainly does not limit the number of patents that the applicant may file. Section 2 does include the word “one” and it should not be read into the claim such that one patent may be requested for one invention. Support for this interpretation is found by contrast to Section 9 which relates to different applicants with patent applications for the same invention.

The parties are in agreement that different applicants cannot be awarded separate patents for the same invention. Novartis holds that the same applicant can be awarded two or more patents for the same invention. The Examiner disagrees. Novartis accepts that there is no economical justification or logic in an applicant having more than one patent, and even sees this behavior as unacceptable. However, so long as there is some difference between the two patents, it is legitimate to award the protection of both patents.

The Commissioner upheld the Examiner’s conclusion and ruled that so long as there is nothing in claim 1 of the divisional that exceeds the scope of the claims of the parent, there is no reason to allow the divisional.

COMMENTS

In the US, the issue of double patenting is dealt with by filing a terminal disclaimer. Although this procedure prevents extending a term of protection (sometimes called ever-greening), it still has negative ramifications. Third-parties such as an alleged infringer may have to show that he is not infringing a number of overlapping patents. Likewise, a competitor may have to show a number of similar patents are invalid or not infringed. This places an unnecessary burden on third parties.

I think that although Novartis is correct that the Law does not explicitly prohibit multiple patents for the same invention, the Commissioner is correct that not to allow it is a reasonable interpretation of the intention and spirit of the law. Because of the large sums of money involved with pharmaceutical patents, this decision may well end up being appealed to the courts. If that happens, we will see how the Israel courts consider double patenting.


Connectivity, Buck Passing and those Damn Marks

June 21, 2015

dont-pass-the-buck-300x214

We have connectivity issues getting into the Israel Patent Office Secure Trademark Database. Where does one start?

Well there are some very nice people in the trademark department who after making other inane suggestions pass the buck to the Govt. Internet Access Helpline.

The Govt. Internet Access Helpline wants to know why do we want access to a govt. website? Are we government employees? Are we subcontractors working on a program?

After explaining the concept of professional legal representation opposite the patent office, the Helper-on-line asked if we can access the services without the smart-card. We explain that this is a new website and this is the only way to do things now. Paper filings are no longer acceptable. Logging in with an email and password is good for filing new applications, but for oppositions, etc. we need internet access using the smart-card.

Q. “Is the website up and running?”

Q. “I provide Internet support for government websites and I can’t get in either.”

A. Well, it’s supposed to be up and running. The nice people in the trademark department think its up and running.

Q. “The problem is your smart card. You have a lawyer’s smart card. Contact Comsign.”

So I contacted Comsign. Turns out that the card is NOT a lawyer’s card. It is a card issued by the Israel Patent Office for accessing the website and for filing documents with the Israel Patent Office. Does the card work? Well it did until the new site went up. Have you registered for the new site? Well we haven’t been asked to. We’ve been talking to people in the trademark office. If they thought we needed to register, they would presumably have registered us, no?

So the buck was passed from trademark office to computer support to connect card connector, to administrator and round and round we go!

Caucus Race

With apologies to Ezekiel, to James Weldon Johnson (1871–1938) and possibly to his brother, J Rosomond Johnson, to be sung to the tune of Dem Bones:

dem bones

Damn Marks!  

Reshut Patentim Connected the Damn Trademarks
Reshut Patentim in Department of Trademarks
Reshut Patentim  Connected Damn Trademarks
Now Hear the Commissioner’s Circular! 

Smart card connected to card reader
Card Reader connected to USB port
USB port recognized by Mother#$%^&
Computer’s connected to the WiFi
The WiFi’s connected to the server
The Servers’ connected to the Internet
Internet’s Connected to Patent Office Portal
Patent Office Portal is connected to Trademarks-on-line
Trademarks on line is connected to the database
Now Hear the Commissioner’s Circular!

Damn Marks, Damn Marks Gonna Walk Around
Damn Marks, Damn Marks Gonna Rise Again
Damn Marks Damn Marks Gonna be Paperless
Now Hear the Commissioner’s Circular! 

Damn Marks, Damn Marks, Damn Trademarks
Damn Marks Damn Marks Damn Trademarks
Damn Marks Damn Marks Damn Trademarks
Now Hear the Commissioner’s Circular! 


IP Best Practices Conference 2015

June 16, 2015

Kim's event

Intellectual Property Resources (IPR) held their annual conference entitled IP Best Practices 2015 in the Tel Aviv Sheraton Hotel on May 11, 2015. I apologize to the organizers and to readers for my tardiness in reporting this. The program can be found here.

This event has become an annual fixture in the Israel IP calendar, and is widely attended by in house counsel, foreign patent attorneys. The speaker list, as always, was impressive. The event was well attended by in-house IP counsel and by sole practitioners. There were also a number of participants who had flown in from abroad, not all of whom were sponsors or speakers.

Ruud Peters, strategic advisor to Philips gave his perspective on IP developments as did Toshimoto Mitono, a Senior IP Counsel at Sony. Whereas the issues and budgetary considerations that Philips and Sony have may not be relevant for most Israel companies and their IP counsel, whether in-house of a service provider, I did find some aspects of the talks relevant, and found the presentations as a whole, thought provoking and well worth attending. It was interesting hearing from Philips dismiss the company as a developer of shaving solutions that does strategic deals with manufacturers of other products, allowing them to use the Philips name on their products, where Philips has only a marginal influence, mostly on the aesthetics. I have long felt this to be the case, but rather enjoyed hearing someone from Philips saying it.

The regional updates were generally good, however the Indian practitioner seemed to get stuck in excruciating details of the formalities requirements for Indian native inventors having to first file in India and only later go abroad. This was of little interest to the other participants, none of whom were Indian. The Peter Sellers Goodness Gracious Me intonation merely accented the irrelevance. Micaela Modiano attempted to convince us that with the right attorney (her?) one could obtain patents for software in Europe. The problem was that one apparently requires novel and inventive hardware elements, so the jury is still out.

Chixue Wei, Chairman of the Board of Linda Liu & Partners didn’t speak English, but this didn’t stop him from giving a presentation, with his very presentable young female assistant doing a simultaneous translation for him. It was rather like a prequel for the Eurovision song contest in that one didn’t actually need to understand what he was saying to follow the gist, with the slides being quite adequate. Frankly I wondered why he didn’t have her present and apologize for his poor English, but note that His Excellence had come in person and would deal with questions on a one-on-one basis. This would have left us assuming that he had some English but just wasn’t up to public speaking. He made a valiant effort to convince us that he could solve all enforcement problems and may indeed by true, but it wasn’t convincing. I have yet to hear a foreign practitioner presenting himself as not being able to provide a solution. However, I can’t see myself intentionally engaging a practitioner who doesn’t speak English and suspect that this is true of others as well.

Terry Rea the Former Acting and Deputy Director USPTO and Deputy Under secretary for Intellectual Property (which is apparently anything but a secretarial position) gave a very polished fireside chat on changes in the USPTO. She even managed to professionally field a naughty question I asked her about when the USPTO examiners would come to realize that there might be relevant art filed in other countries and not necessarily in English.

The US practitioners that presented were drawn from Mintz Levin, Finnegan and Greenbaum & Bernstein. All spoke well and competently. The most useful presentation was that of Michael Fink of Greenbaum & Bernstein who addressed the issue of writing contracts with indemnity clauses, to roll over responsibility for IP to suppliers of components. I found myself making a written note to engage him for this task where relevant.

food at Kim's event

The food, as would be expected from the Sheraton, was plentiful and delicious. Breakfast was filling. During the breaks the refreshments provided an opportunity to graze mingle. Lunch was superb.

kim one eyed

Kim Lindy was taking a back seat on the day, and though ever present, was not introducing speakers. Not exactly a shrinking violet, it turned out that she had damaged her eye. With the patch and the military precision with which the event ran, she was reminiscent of Moshe Dayan. I suspect, that rather than being a Model Major General, behind the scenes, she was more like a Piratical Maid of all Work.

In terms of the quality of the presentations, the opportunity for networking and the refreshments, the event was extraordinary value for money. The fees were less for in-house counsel than for service providers. This is a common strategy abroad, but less frequently practiced in Israel. In theory it ensures lots of big fish for the IP harpoonists service-providers. Of course, manufacturing and research entities would generally be paying the attendant’s fees and a couple of hundred Shekels more or less may make little difference. I can understand but disagree with the short-sightedness of both employees of service providing IP firms and their employers who did not attend in large numbers. There were a number of practitioners from smaller firms, but only two employees from larger IP firms (one from Colb and one from Ehrlich).  I find this worrying. I can understand IP firms not patronizing each other’s events. I can also understand firms seeing IP Factor as competition or not being happy with some blog article or other and avoiding my events, despite their high educational and social value. With over 1600 blog posts, I have criticized decisions and rulings in which all firms were a party at some time or another and so can understand my loyal readership not patronizing my events. The thing is that Kim is not an IP firm. She is a service provider to IP firms, hosting events and training programs and offering software solutions. Now it may be annoying to some that she offers a platform to US and other foreign firms to work directly with in-house counsel but as Thomas Friedman put it, the world has gotten flatter. In-House counsel generally started life in one of the patent service providers. They are aware of foreign firms and know the advantages and disadvantages of engaging them via local practices. By boycotting Kim’s event, the larger Israeli practices are giving the US firms a free playing field.

I don’t expect an Israeli patent attorney to be expert on writing contracts for licensing or subcontracting manufacturing in the US. I would expect a local attorney to work with someone licensed abroad. Kim’s event enables one to learn who specializes in what and to get a brief overview of these sorts of issues which anyway are continuously changing. I think that Israel Attorneys owe it to their clients to have a basic handle on these issues and so am a firm believer in attending IP events like this.


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